'Two-headed beast': China's coal addiction erodes climate goals
Achieving President Xi Jinping’s goal of China reaching peak emissions before 2030 and being carbon neutral by 2060 will require curbing the country’s fleet of coal power plants, reports the Straits Times.
China’s top climate scientists plan road map to 2060 carbon-neutral goal
Researchers at Tsinghua University are developing a road map on how to meet President Xi Jinping’s goal of becoming carbon neutral by 2060, reports Bloomberg.
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Hawaii bans coal power contracts after 2022
Hawaii’s Governor, David Ige, has approved legislation banning state agencies from issuing or renewing a power purchase agreement for coal-generated electricity after the current agreement between Hawaiian Electric and AES expires on December 31, 2022. AES owns and operates the 203 megawatt (MW) Oahu coal plant which is likely to close in September 2022. The plant, which is Hawaii’s only coal plant, runs on fuel imported from Indonesia. The legislation was promoted by the Blue Planet Foundation, a Hawaiian NGO seeking to transform energy use in the state to 100 per cent renewables. (Pacific Business News)
Polish company abandons proposed Oscislowo mine
A coalition of residents, farmers and environmentalists is celebrating the announcement by the Polish coal company ZE PAK that it has abandoned its proposed Oscislowo open cut lignite mine. In a filing for shareholders, ZE PAK reported an impairment of 585 million zloty (US$149 million) as the abandonment of the Oscislowo mine also cuts the operational life of the Patnow I and Patnow II power plants. ZE PAK attributed its decision to increasing emission costs, the prospect that the European Union’s greenhouse gas emission target would be further increased and the complexity and uncertainty about gaining approval for the project. (ZE PAK [Polish], Greenpeace Poland [Polish])
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World Bank arm adopts tougher coal lending policy: The International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, has published new rules that preclude it from making investments in financial institutions without a plan to phase out support for coal. The IFC has stated they will require banks they support to end their exposure by 2030. The IFC has adopted Urgewald’s Global Coal Exit List as the basis for its bank clients to screen investments. The IFC’s new rules have been welcomed by NGOs as likely to drive policy in a range of other financial institutions. (Reuters, Urgewald)
UN human rights rapporteur calls on Cerrejon to suspend part of mining operations: United Nations Special Rapporteur on human rights and the environment, David Boyd, said operations at the Tajo Patilla site in the Cerrejon coal mine complex should be suspended during the COVID-19 pandemic “until it can be shown to be safe.” A statement by London barrister Monica Feria-Tinta, who is representing several Wayuu communities, cited Boyd as stating Colombia should “implement the directives of its own Constitutional Court and to do more to protect the very vulnerable Wayuu...against pollution from the huge El Cerrejon mine and from COVID-19.” (Reuters)
US state proposes new standard to cut pollution from Canada: The Montana Board of Environmental Review has voted to begin the process to develop a new selenium pollution standard of 0.8 micrograms per litre which would be about two to four times lower than currently allowed in the US. Selenium pollution from four Teck Resources metallurgical coal mines flows from the Elk River in British Columbia and crosses the US border into Lake Koocanusa and the Kootenai River in Montana. A recent study found selenium levels in the Elk River were up to four times higher than allowed under British Columbia’s current guideline. The proposed new standards, which would be marginally lower than the level of 1 microgram per litre found in sediment samples in Lake Koocanusa, has been welcomed by First Nations and environmental groups. (Montana Public Radio)
Poland seeks European Commission OK for mine subsidies: The Polish Government and Solidarity, the union that covers coal mining workers, have negotiated an agreement to shut down hard coal mines owned by PGG by 2049. PGG, the country’s largest hard coal producer, had flagged the need to close loss-making mines. A government commitment to subsidise the operation of the mines requires the approval of the European Commission. However, analysts argue this approval is unlikely as the subsidies are a clear breach of rules restricting state aid. “It’s the most blatant fossil fuel subsidy out there,” said Dave Jones from Ember, a European energy think tank. The agreement does not cover mines owned by JSW and Bodanka. (Climate Changes News, Fitch Ratings, Ember [Twitter thread])
Indian utility cans further land acquisition for new coal projects: Publicly owned utility NTPC, which generates about one-quarter of India’s electricity, will not buy any more land “in the near future” for new coal plants and will instead focus on renewable projects. According to the Global Coal Plant Tracker, NTPC currently has about 50,040 MW of commissioned coal plants and a further 11,915 MW under construction. NTPC has announced it plans to have 10,000 MW of renewable capacity by 2022 and a further 22,000 MW by 2032. Land acquisition for coal projects often provokes intense opposition. NTPC is discussing the availability of land for renewable projects with state governments of Gujarat, Rajasthan, Madhya Pradesh, Maharashtra and Andhra Pradesh. (Business Standard, Global Coal Plant Tracker)
Queensland Government approves huge new mine as election nears: Queensland Premier Anastacia Palaszczuk has announced a mining licence has been approved for Pembroke Resources Olive Downs metallurgical coal mine in central Queensland. Pembroke Resources is backed by the private equity firm, Denham Capital. The company, which claims the mine could operate for over 75 years, has been given approval to mine up to 15 million tonnes of coal from an open cut mine. The project is proposed to cover 16,300 hectares, including clearing 4827 hectares of forest deemed “essential habitat” for the koala. (Queensland Times, ABC News)
“China's energy policy is like a two-headed beast, with each head trying to run in the opposite direction,”
said Li Shuo, senior climate and energy officer at Greenpeace China.
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Australia: Journalists fear they may be dragged into a ‘conspiracy’ claim as Adani lawyers press a climate activist to disclose who received leaked information about the Carmichael coal project.
Germany: Hundreds of climate protestors occupy Garzweiler lignite mine.
India: NTPC announces a tender for a coal-to-methanol gasification project at the Dankuni mine in West Bengal.
India: NTPC seeks up to 5 million tonnes of biomass pellets for co-firing at up to 17 coal plants.
Japan: New Japan Beyond Coal campaign launched to shut the country’s 163 coal units and oppose the 17 other units proposed or under construction.
New Zealand: Eighteen Extinction Rebellion supporters arrested at a protest against proposed Bathurst Resources coal mine expansion.
Philippines: NGOs file legal challenge against DMCI Power Corporation’s proposed 15 MW Aborlen coal plant in Palawan province.
South Korea: Publicly owned utility KEPCO set to decide on October 5 whether to invest in the 1200 MW Vung Ang 2 project in Vietnam.
US: Energy plan by AFL-CIO and Energy Futures Initiative promotes carbon capture for coal plants.
US: Judge rules the acting director of Bureau of Land Management, William Perry Pendley, had “served unlawfully”, raising legal doubts about agency decisions including on mining permits.
“Not only are there compelling reasons to shut down coal from an environmental perspective, it's also compelling from an economic perspective, which is in the best interest of our customers,”
said Paul Hinnenkamp, the Chief Operating Officer of Entergy, a US power utility.
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Judge rejects merger of two US coal companies as another utility accelerates plant closures: US District Court Judge Sarah Pitlyk has granted an injunction sought by the Federal Trade Commission to block the proposed merger of Peabody Energy and Arch Resources thermal coal mining operations in Wyoming and Colorado. The companies had proposed the merger to be able to better compete with renewables and gas generation but the judge found greater ownership concentration would reduce competition between coal suppliers. Arch Resources has indicated it will cut production at some mines and look to closing others. The decision came on the same day that Vistra Corporation announced an increased emphasis on renewables and batteries with coal closures between 2022 and 2027 increased to include seven plants with a combined capacity of 6800 MW. (S & P Global, Financial Post, Vistra Corporation)
Australian government agency projects coal crunch: The Australian Government’s latest Energy and Resources Quarterly estimates the seaborne thermal coal trade will decline by 63 million tonnes in 2020, a six per cent decline to 1043 million tonnes. The decline in the European market has hit Colombian exporters while COVID-19 impacts have affected Indian and Chinese demand. Both India and China are emphasising increased energy self-sufficiency through a reduction in coal imports. The report estimates seaborne thermal coal demand is likely to only “grow weakly” in 2021 and 2022 and remain below 2019 levels. The report estimates spot seaborne thermal coal prices are likely to increase from US$54 per tonne in 2020 to US$61 and US$65 per tonne in 2021 and 2022 respectively. (Sydney Morning Herald, Australian Department of Industry, Science, Energy and Resources)
Russian coal production project to fall by over 10 per cent: Russia’s Ministry of Economic Development estimates coal production will fall by 10.5 per cent in 2020 to 395 million tonnes. In 2019, Russia exported 181 million tonnes of thermal coal but has been hit by declining European demand and COVID-19 impacts on prices in the Asian market. Russian coal exports to Japan have increased as buyers seeks to diversify suppliers while pollution control measures in South Korea have boost demand for Russia’s low sulphur coal. The Australian Government’s resources agency estimates Russia’s exports will fall to about 175 million tonnes in 2020 and rebound to be marginally higher than pre-COVID-19 levels in 2021. (Tass, Australian Government [p. 11, Pdf])
South Korean bank rules out support for new coal plants: The KB Financial Group, one of South Korea’s four largest banks, will cease financing the construction of new coal plants. The policy change, which applies to all 12 of the bank’s subsidiaries, explicitly rules out financing new coal projects at home or abroad and excludes the purchase of bonds for new coal plants or special-purpose companies established to build them. The new policy is silent on its approach to existing coal plants, new mines or other coal infrastructure. KB is the lead financier of two 2000 MW coal power projects in South Korea: the Gangreung An-in Project and the Gosung Ha-ee Project. KB Securities has also committed to underwrite bonds for the 2000 MW Samcheok coal power project which is currently under construction. While considered a weak policy by NGOs, KB’s announcement increases pressure on South Korea’s other major banks which have not yet announced coal policies. (Korea Herald, Reclaim Finance)
Indonesia’s coal commitments jeopardising renewables growth: The growing financial crisis of Indonesia’s publicly owned utility PLN risks crimping the utility’s plans to increase renewable capacity, according to the Institute for Energy Economics and Financial Analysis. PLN’s bank and bond debts doubled during 2015 to 2019 to almost 400 trillion rupiah (US$26.75 billion) as the cost of payments to independent power producers, predominantly for coal projects, has grown by 40 per cent over the same time. Underpinning the increased costs is PLN’s commitment to implementing President Jokowi’s plan to commission 35,000 MW of new capacity, 60 per cent of it from coal plants. Moody’s has warned there is a “very high likelihood” of PLN requiring a bailout from the Indonesian Government. (Jakarta Post)
US utility confirms mothballing of CCS plant and associated power plant: In a filing with the Electric Reliability Council of Texas (ERCOT), NRG Energy has confirmed the Petra Nova carbon capture and storage (CCS) plant at the Parish Generating Station will be mothballed. The CCS plant was designed to process about 40 per cent of the waste gas from the 615 MW lignite-fired Unit 8 at the power station but low oil prices rendered the sale of compressed carbon dioxide unviable. To power the CCS unit Petra Nova Power, the joint venture company established for the project, built a 71 MW gas-fired plant. With the collapse of the CCS project Petra Nova Power have now notified ERCOT the unit will no longer be available to supply power to the market but will be mothballed from December 20, 2020 and then available to operate between June 1 and September 30, 2021. (Argus, Electric Reliability Council of Texas)
Doubts raised about viability of US CCS project pitch: The Institute for Energy Economics and Financial Analysis (IEEFA) has warned that the costs of adding a CCS plant to a 45 year old 455 MW coal unit at the Milton R. Young plant in North Dakota are being underestimated and pose a risk to electricity consumers. The Square Butte Electric Cooperative and Minnkota Power Cooperative, which own and operate the plant, estimate a CCS unit to capture 90 per cent of the carbon dioxide from the plant could cost between US$1 billion and US$1.6 billion. While the cooperatives have claimed they won’t proceed with the project if it “substantially increases electric rates”, IEEFA estimates the plant is likely to be far more expensive and struggle to sell the captured carbon dioxide. IEEFA argues the unit is already uncompetitive with prevailing market power prices and a CCS unit will only increase the power price disadvantage. (Inforum, Institute for Energy Economics and Financial Analysis)
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Resources and Energy Quarterly September 2020, Australian Department of Industry, Science, Energy and Resources, September 2020. (Pdf) (The chapter on metallurgical coal is here; the chapter on thermal coal is here; Forecast data is here; historical data is here.)
The chapters on metallurgical coal (11 pages) and thermal coal (15 pages) provide a concise overview of the key factors affecting the global seaborne coal market and some of the impacts of COVID-19 restriction on coal exporters.
China’s Long Road to Carbon Neutrality will Reshape World Economy, BloombergNEF, September 2020. (Pdf)
This 9-page briefing note provides a concise overview of the potential implications for China’s energy policy of President Xi Jinping’s announcement of the goal of carbon dioxide emissions peaking before 2030 and achieving carbon neutrality before 2060.
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